In the last five years, Nebraskas housing market experienced significant changesespecially impacting families earning under $250,000 annually.
This group represents most households statewide, where median earnings are about $72,000.
Nebraskas housing stock is dominated by detached single-family homes about 7075% of homes fall in this category.
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Age and Condition Variations
Home age and condition varied widely between urban and rural areas.
In rural parts of Nebraska, much of the housing is older.
For example:
Rural buyers often purchased older houses, some needing significant repairs.
In North Platte, local officials noted about half the homes on the market needed substantial work after purchase.
New vs.
Existing Homes
The majority of homes bought by this income group were existing homes rather than new constructions.
This construction slowdown meant fewer new houses available for sale, especially in small towns.
By the 2020s, building activity increased but was still playing catch-up.
Where People Are Buying: Urban vs.
Buyers in these cities tended to purchase in suburban neighborhoods or established city subdivisions.
Rural Areas and Small Towns
Outside the major metros, Nebraskas rural counties present a mixed picture.
In some rural towns, housing shortages reached crisis levels.
Towns like Stuart went the entire 2010s without any new homes built.
Central Nebraska cities like Grand Island, Kearney, and Columbus experienced more modest growth.
Even in western Nebraska (the Panhandle region), many areas saw prices rise in 20202022.
Moving Patterns: Upsizing, Downsizing, or Staying Put?
For those who moved within Nebraska, the most common reason was wanting more space or a better house.
Another trend that emerged strongly in 20212023 was homeowners staying put due to low interest rates.
Many people refinanced or bought homes at historically low rates (~3%) during 20202021.
Once rates increased later, those owners became reluctant to sell their home and give up their advantageous mortgage.
These loans require no down payment and often come with slightly lower interest rates than conventional loans.
For families buying in small towns or rural areas, USDA loans were often the best financing option available.
Influence of Interest Rate Shifts
Interest rates on home mortgages fluctuated dramatically over this period.
In 2018, rates were around 4.5% to 5% for a 30-year fixed loan.
By the end of 2019, they had dipped to closer to 3.74%.
When the COVID-19 pandemic hit in 2020, the Federal Reserve slashed rates, and mortgage rates plummeted.
Throughout 2020 and 2021, rates mostly hovered in the high-2% to low-3% range.
This super-low rate environment supercharged homebuying demand.
With cheaper borrowing costs, Nebraska families felt confident stretching their budgets.
The tide turned in 2022.
As inflation picked up, the Federal Reserve started raising interest rates sharply.
By the spring of 2022, the 30-year rate was around 5%.
By the end of 2022, it averaged about 5.34% for the year.
This rapid rise had a chilling effect on the market.
Many prospective buyers in Nebraska had to lower their price range or pause their home search.
With many people suddenly able to work from home, space became a premium.
The demand for homes in 2020 and 2021 was so high that supply couldnt keep up.
Some city dwellers moved to more rural areas or lake communities for more space since they could work remotely.
Post-Pandemic Trends (20222023)
After the initial pandemic waves, some behaviors normalized while others persisted.
What changed was the level of urgency.
As interest rates climbed and the pandemic housing frenzy cooled, buyers became more cautious and deliberate.
There were also fewer speculative or investor buyers in the market by 20222023.
During 2021, some investors or house flippers entered the market because home values were rising so rapidly.
But when rates went up and price growth slowed, many of those non-resident buyers pulled back.
Home Price Trends and Affordability
Housing prices in Nebraska climbed significantly from 2018 to 2023.
Over the next five years, prices rose to the mid-$200,000s.
The median home value in Nebraska surpassed $200,000 for the first time in March 2021.
By June 2022, the median sale price had reached about $270,000.
It fluctuated around the mid-$260s to low-$270s through 2023.
The rapid rise in prices directly impacted affordability.
This ratio had been higher in previous years, indicating better affordability.
The affordability challenge was most severe for low-income communities.
In Nebraskas lowest-income neighborhoods, home prices rose much faster than local incomes.
Comparing 20182023 with 20082017
The two periods were quite different for Nebraska homebuyers.
From 2008 to 2017, Nebraskas home prices rose modestly.
In contrast, 20182023 saw much sharper price increases, especially mid-period.
The pandemic-era spike had no parallel in 20082017.
Housing supply also differed markedly between periods.
The 20082017 period was marked by an overhang of supply early on and then under-building later.
In contrast, 20182023 began already tight on supply and became outright scarce by 20202022.
